Twitter feels, not unreasonably, that patents are not always used in the right spirit. Patents can often be obtained just to threaten litigation and force settlement payments, rather than to develop or commercialise the patented invention. The most obvious examples are patent trolls - companies which buy patents solely to make money from threatening or commencing patent litigation.
It is this aggressive use of patents that Twitter wants to address. It states that software patents should only be used “to make a positive impact in the world” and that means for “defensive purposes.”
The IPA transfers the rights to patents (or patentable inventions) developed by employees and inventors to Twitter, but imposes a contractual obligation on Twitter to only use those patents for defensive purposes. It also provides the inventor with certain rights if Twitter breach this obligation. So if Twitter acted like a patent troll and raised patent infringement proceedings against an ‘innocent’ company, the inventor would be able to grant that company a licence of the patent to negate those proceedings.
Cynics will point to the fact that Twitter doesn’t have many patents, so this is easier for them to promote than other technology and social media giants, while providing some good PR. Nonetheless it does address an important issue on patent use and has already met with favourable comment from the tech writer and developer community.
However it does raise some practical issues. One is with the drafting as the definition of “defensive purposes” is extremely wide. What the inventor thinks is defensive might not be same as the company. Another is the concept that when patents assigned under an IPA are in turn sold on, they are sold with the condition that the IPA restrictions still apply – i.e. that the patents are only for defensive purposes and that the inventor has certain rights to sub-licence the patents. Agreeing to impose restrictions on IP assets is something many companies may struggle with. It may also concern potential investors in or acquirers of a company who always like to see ‘clean’ IP assets.
It also may not do a great deal for smaller companies who can’t afford huge patent portfolio acquisitions. Twitter support a common view that patents are primarily for defensive purposes. I find it hard to equate such use with “making a positive impact in the world” and it seems to me the original purpose of patent has in many cases been lost amidst corporate risk strategies. A patent is a contract between the inventor and the state. The inventor gets the benefit of a monopoly period to exploit the invention, and in return society benefits by the invention being immediately disclosed and being free to use when the monopoly period expires.
However for many companies patents are simply defensive assets. The more patents you have the better position you are in if a competitor sues you for patent infringement. Yes you may be infringing their patent, but given your own vast portfolio of patents they are probably infringing one of yours, so let’s just sign a cross licence and move on.
This is by no means a new development and it is naive to think it will disappear. However with technology and social media companies this tactic seems to be getting more extreme. Recent patent portfolio purchases such as Microsoft agreeing to pay AOL $1billion for an 800 patent portfolio and Google agreeing to acquire Motorola patents for $12.5 billion involve quite staggering sums, particularly when the value and position of the selling entity is considered.
It is hard to view these acquisitions are examples of patents being used to make a positive impact in the world. They have little to do with innovation and can hardly encourage small companies who are genuinely inventive and innovative to invest in patent protection.
Perhaps the answer lies in the patent system itself and the ability of companies to obtain patents for computer software, particularly in the US. A recent report by financial analysts in the US suggested that around 30,000 patents have been filed relating to fundamental aspects of social networking, data management and e-commerce. That makes it very hard to invent without also infringing.
So while Twitter’s IPA initiative is a laudable one it may not turn out to be a defining moment in the approach to patent use.